The number of listeners on Acast decreased by 12% in Q4 2023 year on year, amounting to 1,162 million, due to Apple’s iOS17 update, which affects how episodes are being automatically downloaded, according to an announcement from the independent podcast company.
Apple’s iOS17 update started rolling out in September last year and has had an effect on listener measurement for podcasters, as the application no longer downloads previous episodes – any one that’s older than seven days – when a listener is subscribed and only automatic new ones.
Automatic downloads are also paused when a listener has not played the latest five episodes of a show they’re subscribed to for more than 15 days. As a result, a number of podcasters and podcast platforms have experienced a drop in listener numbers, including Acast which first reported this in its Q3 2023 report when it experienced a 3% drop in listeners year on year.
However, the iOS17 update has had a positive impact on the average revenue per listen (ARPL) as it provides a more accurate reading of listener frequency. According to its most recent report, Acast’s ARPL increased from SEK 0.33 (£0.025) in Q3 2023 to SEK 0.43 (£0.033) in Q4 2023, up by 24% year on year. This update has led the company to make a non-cash-flow-affecting revaluation of podcast contracts in Q4 2023, which led to a decrease in SEK 76 million (£57.5 million).
“As a result of the Apple iOS17 update, listener metrics across the industry have been adjusted to more accurately reflect a podcast audience size,” an Acast spokesperson told PodPod. “These listener metrics inform the costs of advertising campaigns, and therefore, the advertising rates and contracts associated with them have been re-evaluated on a case-by-case basis to ensure the best result for both our podcasters and advertisers.”
Overall, Acast experienced a profitable final quarter as its net sales grew to SEK 494.2 million (£37.4 million), up by 15% from the previous quarter and up by nearly 9% year on year. The increase in net sales mostly came from Acast’s continued development in North America, with turnover in the region increasing by 19% in the region year on year (SEK 137.7 million), while net sales in Europe grew by 5% and by 8% in Other Markets including the Middle East and South-East Asia.
Acast also reported that it has reached a positive adjusted EBITDA – earnings before interest – in the fourth quarter for the first time in the company’s history, at SEK 16.3 million (£1.23 million), while also reducing its operating costs by 9%.
Other significant developments for the company in Q4 2023 include the launch of Performance+ under its podcast database Podchaser, which uses proprietary data modelling to identify which podcasts are most effective for direct response campaigns for advertisers. Acast also launched a feature in November on its self-serve podcast advertising platform which makes it more efficient for advertisers to plan and book host-read sponsorship campaigns.
Acast CEO Ross Adams said that despite advertising markets still being affected by the weakened economy, he expects Acast to have a positive start for 2023, saying that its position in the industry is “stronger today than it was a year ago”.
“Acast finishes the year strong and we enter 2024 with early signs of improved momentum in the market,” said Adams. “A strong underlying development during the last quarter of the year creates a path towards a positive EBITDA in 2024.
“The work to balance tight cost control with the development of new services and tools that help advertisers and podcast creators reach a wide audience will have continued high priority for us in the coming year. We enter 2024 with a robust balance sheet that increases our competitiveness even more.”